focus on cashflow & organic growth · 2017. 4. 6. · investor update presentation. april 2017....
TRANSCRIPT
FOCUS ON CASHFLOW & ORGANIC GROWTH
INVESTOR UPDATE PRESENTATION
APRIL 2017
TERRACOM
The information contained in this document (“Presentation”) has been prepared by TerraCom Limited (the “Company”). This Presentation doesnot constitute an offer or invitation to any person to subscribe for or apply for any securities in the Company. This Presentation containssummary information of a general nature about TerraCom and its activities current as at 4 April 2017. It should be read with the Company’sother periodic continuous disclosure announcements lodged with the ASX.
While the information contained in this Presentation has been prepared in good faith, neither the Company or any of its shareholders, directors,officers, agents, employees or advisers give any representations or warranties (express or limited) as to the accuracy, reliability orcompleteness of the information in this presentation, or of any other written or oral information made or to be made available to anyinterested party or its advisers (all such information being referred to as ‘information’) and liability therefore is expressly disclaimed.Accordingly, to the full extent permitted by law, neither the Company nor any of its shareholders, directors, officers, agents, employees oradvisers take any responsibility for, or will accept any liability whether direct or indirect, express or limited, contractual, tortious, statutory orotherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained in this Presentation or for anyerrors, omissions or misstatements or for any loss, however arising, from the use of this Presentation.
This Presentation should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers,agents, employees or advisers. Each party to whom this Presentation is made available must make its own independent assessment of theCompany after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections oropinions contained in this Presentation necessarily involve significant elements of subjective judgement, analysis and assumptions and eachrecipient should satisfy itself in relations to such matters.
This Presentation may include certain statements that may be deemed ‘forward-looking statements’. All statements in this Presentation thataddress future activities or events are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results mayvary materially. The Company does not represent, warrant or guarantee that the information in this Presentation is complete or accurate. Tothe maximum extent permitted by law, the Company and its directors and officers disclaim any responsibility to inform any recipient of thisPresentation of any other matter that subsequently comes to its notice which may affect any of the information contained in this Presentation.Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, continued availabilityof capital and financing, and general economic, market or business conditions.
Investors are cautioned that any forward-looking statements are not guarantees of future performance and that actual results or developmentsmay differ materially from those projected in forward-looking statements.
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DISCLAIMER
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OVERVIEWFY 2017 REPORT CARD
Restructured balance sheet • Successfully replaced short term debt through the issue of 5-year interest only
EuroClear traded bonds
Restructured Board and Management Team• Increased capability to deliver• Rationalised and reduced corporate overheads
Recommenced mining operations in Mongolia• Secured Kingho 5.5 year contract for ~7.5Mt of sales linked to seabourne
indices underpinning restart• Already shipped just under 100kt to date
Blair Athol Thermal Coal Mine in Australia• Executed agreements to secure the A$1 acquisition of Blair Athol (BA) thermal
coal mine in Bowen Basin• Secured State Indicative Approval from DNRM Minister and satisfied
Conditions to facilitate Mining Lease transfer in April 2017• Mobilisation to commence by end April 2017 with BA mining and rehabilitation
to recommence in June 2017 and first cargo assembled in late June 2017
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OVERVIEWFY 2017 WORK IN PROGRESS
Organic Expansion of BA in Australia• Complete work required to convert some of the BA 44Mt JORC 2012 resource# into
reserve and extend the production profile beyond 7 years#• Complete evaluations and secure most prospective satellite coal basins
Organic Expansion of BNU Coking Coal Mine in Mongolia• Complete infill exploration work to enable progressive opening of further pits along
the Noyon Basin sub crop
Indomet Hard Coking Coal Mine in Indonesia• Still in discussion to acquire operating hard coking coal mine in Central Kalimantan,
Indonesia targeting completion in Q3 2017
# Note no change to this information from previous disclosures and see competent person statement at end of presentation
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OVERVIEWFOCUS ON CASHFLOW AND GROWTH IN STRONG MARKET Independent coking coal and high quality thermal coal producer
• Targeting production from 3 mines in 3 regions with a total target output rate of 5Mtpa* by end of 2017 and all mines are forecast to deliver strong positive cash flows
Blair Athol Thermal Coal Mine in Australia#• A$1 acquisition of Blair Athol (BA) thermal coal mine in Bowen Basin,
Australia completed and mining operations to commence in Q2 2017 BNU Hard Coking Coal Mine in Mongolia
• Successfully restarted BNU mining operations underpinned by 5.5yr coal offtake agreement for ~7.5Mt of sales linked to seabourne prices
Indomet Hard Coking Coal Mine in Indonesia• In discussion to acquire operating hard coking coal mine in Central
Kalimantan, Indonesia targeting completion in Q3 2017 Large JORC resource base* (excludes BA and Indomet)
• 304 Mt JORC 2004 of coking and thermal coal in Mongolia• 2.1 Bt JORC 2004 of thermal and PCI coal in Australia
Strong development pipeline• Organic /Brownfields expansion from each of the 3 regional hubs
through development of large surrounding resources Resilient balance sheet
• After restructuring through the issuance of a 5-year interest-only EuroClear-traded bonds
Strong Board and management team • Proven track record in building and operating coal mines
3 RegionsOperations in Australia, Mongolia & Indonesia
A$1 Acquisitionof Blair Athol thermal coal mine in Australia
>120 Yearsof combined management experience
$ Cash GeneratingCapitalising on strong coal market targeting 5 Mtpa rate across 3 countries by end of 2017
Note #: Blair Athol Mine acquisition is subject to relevant Queensland Government approvals Note *: no change to this information from previous disclosures and see competent person statement at end of presentation
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MANAGEMENT TEAM+120 YEARS OF EXPERIENCE IN COAL
Cameron McRae
Executive Chairman
Served a 28 year career at Rio Tinto, holding executive level positions in 5 countries. Cameron was CEO-President of Oyu Tolgoi (OT) copper-gold business in Mongolia and CEO of Richards Bay Minerals in South Africa.
MichaelAvery
Executive Director Vice President,Corporate Development
Michael has worked for blue chip mining companies Rio Tinto and BHP Billiton in operations both within Australia and internationally. Michael is a member of the Australian Institute of Mining and Metallurgy.
DavidStone
Executive Director Vice President,Operations
Over 25 years experience working for MIM / Xstrata, BHP and Anglo America.David has been responsible for several of Xstrata’s mining complexes and Xstrata’s underground operations globally.
NathanBoom
CFO & Company Secretary
12 year career working at large multinationals such as Xstrata Coal and Tenova which has provided him with extensive exposure in finance, accounting and business restructuring.
JonathonMcCarthy
Head of Operations Australia
Jonathon has over 10 years of mining industry experience across Australia, Asia and North America. He has worked in several large scale open pit operations across multiples commodities with a strong focus on coal mining.
Sam Bowles
Head of OperationsMongolia
Sam has over 15 years of experience working in large scale coal mining operations in Australia and Mongolia. Prior to joining with TerraCom. Sam was COO of MMC and responsible for the operation of Mongolia’s largest coal mining, processing and export business.
AUSTRALIA BLAIR ATHOL MINE ACQUISITION AND RESTART ORGANIC EXPANSION OF BLAIR ATHOL EXPLORATION & DEVELOPMENT OF NORTHERN GALILEE PROJECT EXPLORATION & DEVELOPMENT OF SPRINGSURE PROJECT
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AUSTRALIABLAIR ATHOL THERMAL COAL MINE (BA)
Final stages of acquiring mothballed Blair Athol Mine^ in Australia for $1 which includes: World class mine infrastructure capable of supporting 12Mtpa including workshops,
stores and offices Dragline and all mining plant and equipment required to deliver mining plans Rio Tinto providing A$80m cash for reclamation and Gov. of Qld confirmed this liability in
Nov 2015
Mine plans to operate at 2Mtpa rate for 7 years# with mining operations recommencing in June 2017 and first coal sales in July 2017:
Target product specification (ad) of 12.5% ash , 5,350kcal NAR and 0.31% TS
44Mt JORC 2012 Resource# providing potential for additional production from BA
Positioned well on cost curve set to deliver strong margins
Re-commissioning and working capital costs of BA fully funded from US$12m funding facility plus contractor working capital arrangements of A$11.6m
Organic expansion potential to combine BA with neighbouring properties to give 30+ year life
^ Note Blair Athol Mine acquisition is subject to relevant Queensland Government approvals
# Note no change to this information from previous disclosures and see competent person
QUEENSLAND EXPANSIONORGANIC GROWTH FROM STRATEGICALLY LOCATED ASSETS
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Zone 1 – Northern Galilee Hub
Zone 2 – Central Bowen Hub
Zone 3 – Central Western Hub
*
The BA acquisition revalues TerraCom’s Australian portfolio through providing a hub for their development across major coal basins in Queensland including: Northern Galilee Project (1.9Bt JORC 2004# is large thermal
resource with multi pit potential crossed by under-utilised rail and port system
Springsure Project * (190Mt JORC 2004#) a high grade thermal/PCI resource adjacent to existing rail infrastructure with Bandanna’s adjoining Fernlee Project (EPC1103) being acquired from liquidators adding further scale potential (currently going through Indicative Approval process.
* Note Springsure is 36% owned by TerraCom and Fernleeonce completed is to be 100% owned by TerraCom
# Note no change to this information from previous disclosures and see competent person
MONGOLIA SOUTH GOBI COKING COAL ASSETS BNU COKING COAL MINE BNU CHPP DEVELOPMENT UVS COKING COAL AND POTASH/BRINES ASSETS MID GOBI THERMAL COAL ASSETS
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MONGOLIABNU HARD COKING COAL MINE
Operate, optimise and expand BNU coking coaloperations in South Gobi
Ramping up to 1.5Mtpa of sales* generating strongestimated margins
Capitalise on softer but still strong HCC prices through5.5 year offtake agreement linked to seaborne priceindices
BNU targeted washed product specification (db) is fora mid volatile hard coking coal: <10.5% Ash, 23% -27% Volatile Matter, 0.3% - 0.6% Total Sulphur, GIndex 80-95, Y Index 22-26
Construction to commence by end Q2 2017 onvendor-financed on site CHPP delivering improvedmargin
Multi-pit expansion strategy with 50km of projectedcoal basin edge across the South Gobi tenements with83Mt JORC 2004 Resource*
Note *: no change to this information from previous disclosures and see competent person statement at end of presentation
SOUTH GOBI EXPANSIONORGANIC GROWTH THROUGH REGIONAL EXPANSION
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MONGOLIASTRONG LOCAL EXPERIENCE AND ASSET PORTFOLIO
Strong local history and experience operating in Mongoliasince 2011
Large portfolio of Mining and Exploration Licences instrategic positions with links to large markets
South Gobi Project (JORC 83Mt JORC 2004*) of hardcoking coal
Uvs Project prospective for Hard Coking Coal, Potash andassociated brines (Lithium and Magnesium) in northernMongolia close to Russian border
Mid Gobi Project (JORC 221Mt JORC 2004*) of thermalcoal
Note *: no change to this information from previous disclosures and see competent person statement at end of presentation
INDONESIA CENTRAL KALIMANTAN POTENTIAL ACQUISITION CASHFLOW POSITIVE COKING COAL MINE SIGNIFICANT EXPANSION POTENTIAL
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INDONESIAINDOMET HARD COKING COAL MINE
Note: Indomet acquisition is subject to finalisation of due diligence completion of acquisition
Due diligence being conducted on an operational hardcoking coal mine in Central Kalimantan (Indomet) withtarget acquisition completion in Q3 2017
Should be immediately cash generative at time ofcompletion with strong cash margins forecast
Indomet advises that initial expectations is for 0.5 - 0.7Mtpa production of hard coking coal with immediateopportunity to acquire neighbouring mine with fullydeveloped port and road infrastructure and increase totalproduction to 1.2 - 1.5 Mtpa with further organicexpansion potential
Located in Central Kalimantan approximately 28 km fromthe Barito River and close to Muara Teweh Townshipwhich is approximately 400km upstream of TaboneoTrans-shipment Port (2kt to 10kt Barges)
Hard coking coal specification with medium VM, highfluidity, CSNs of 8-9
Simple low cost extraction; non complex resource withthick shallow seams
APPENDIX• CORPORATE MORE INFORMATION• AUSTRALIA MORE INFORMATION• MONGOLIA MORE INFORMATION• COMPETENT PERSONS STATEMENTS
CORPORATE
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STRONG DEVELOPMENT PIPLELINE
Exploration Development Production
South Gobi BNU
Uvs
Blair Athol*
INDOMET#
Northern Galilee Complex
Springsure
Sierra
Kolan
Middle Gobi
LARGE PORTFOLIO OF HIGH QUALITY ASSETS BEING PROGRESSED
Note *: Blair Athol Mine acquisition is subject to relevant Queensland Government approvals Note #: Indomet is subject to finalisation of DD and completion of acquisition
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DEBT RESTRUCTURING COMPLETEGIVES COMPANY CASHFLOW HEADROOM, STABILITY AND FLEXIBILITY
Old Structure New Structure
Working Capital & Related FacilitiesUS$47mn
Noble Group
Amortising NotesUS$55mnOCP Asia
Secured Bond US$124mn face value (US$129mn
from 30 June 2017) 5 years, interest-only (12.5% p.a.) Revenue share of 0.75% (Post BA) First interest payment 30 June 2017 Ability for TER to elect to PIK 50% Includes US$7mn of new funding
Super Senior Notes US$17mn face value US$12mn repayable after 1 year due
on 30 June 2017, US$5mn rolls into Secured Bond
Interest 15% p.a.
Convertible NotesUS$5mn
JP Morgan
Acquired by new investors and converted to equity in January 2016
Convertible NotesUS$5mnOCP Asia
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CAPITAL STRUCTURE
ASX Code TER
Share Price A$0.032
Shares 2.7B
Market Cap A$86.88M
Finance Instruments in Place
Warrants OCP Asia hold 126,308,306 Detachable Warrants with an Exercise Price which is the lower of the Cross Listing Price and the Market Price and which expire on 28 February 2021
Options Fosters Stock Broking have 15,000,000 options with a strike price equal to $0.03 and with an expiry date of 31 August 2018 and 15,000,000 options with a strike price equal to $0.045 and with an expiry date of 31 August 2018.
Convertible Notes Nil Outstanding
Top 20 Share Holders Outside Australia
76%
Top 20 Share Holders From Australia 9%
Other Share Holders 15%
Trading Summary (3 Apr 17) Share Price Performance
Ownership Summary (%) Financial Instruments
MAJOR SHAREHOLDERS COMMITTED TO BUILDING VALUE
AUSTRALIA
BLAIR ATHOL COAL MINE ACQUISITIONPROGRESSING THROUGH FINAL APPROVALS#
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ACQUISITION PRICEA$1
TRANSACTION COMPLETIONTarget April 2017
Acquisition of coal mine in care and maintenance
Mine plan capable of delivering a 7 year mining life at 2Mtpa*
Rio Tinto providing A$80mn for reclamation
GoQ confirmed this liability in Nov 2015
Location
C.20 km north west of Clermont in the Bowen Basin of Central Queensland, Australia
History
Site production peaked in 2009 with 11.3 Mt of coal exported in the year
Placed on C&M by Rio Tinto when full production commenced at its neighboring Clermont mine
Infrastructure and equipment
Plant and equipment incl. Dragline for re-start remains on-site and included in $1 purchase price
Mine infrastructure capable of supporting 12Mtpa includes workshops, stores and offices
Plans to utilise nearby rail access infrastructure
Further Expansion
JORC 2012 Resource of 44Mt*
Potential to extend into neighboring projects
INCLUDESDragline & mobile equipment
QUICK RESTARTShort mobilisation and commissioning period
Note #: Blair Athol Mine acquisition is subject to relevant Queensland Government approvals Note *: No change to this information from previous disclosures and see competent person statement at end of presentation
QUEENSLAND PROJECT PIPELINESTRATEGICALLY LOCATED ASSETS
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Zone 1 – Northern Galilee Hub
Zone 2 – Central Bowen Hub
Zone 3 – Central Western Hub
*
Note: Blair Athol Mine acquisition is subject to relevant Queensland Government approvals
QUEENSLAND PROJECT PIPELINELARGE RESOURCE WITH SIGNIFICANT EXPANSION POTENTIAL
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Tenement
JORC 2004 Resources (Mt)Potential coal
typeIndependent
geologistMeasured Indicated Inferred Total
Hughenden - 133 1,076 1,209 Thermal MDM
Clyde Park - 51 677 728 Thermal MDM /Palaris / Xstract
Kolan - - - - Coking MDM
Springsure - 43 148 191 Thermal/PCI MDM
Pentland - - - - Thermal/PCI MDM
Total - 227 1,901 2,128
Australian JORC Resource Table (excluding Blair Athol)
Source: TerraComThe information presented is available to view on TerraCom’s website. TerraCom is not aware of any new information or data that materially affectsthe information included in the above table in relation to the estimates of Mineral Resources and confirms that all material assumptions and technicalparameters underpinning the estimates continue to apply and have not materially changed.
MONGOLIA
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SOUTH GOBI PROJECTNOYON BASIN – MULTIPLE MINING AND EXPLORATION LICENCES
The South Gobi Project comprises contiguous mining and exploration licenses covering 696 sq km in the Noyon Coal Basin• c.850 km southwest of Ulaanbaatar• 140 km from the Chinese border coal
station of Ceke• Connects by road and rail to northern
Chinese steel producers• Potential link to seaborne market
• There are currently three primary groups of mining licenses: • North: 100% owned, comprising mining,
pre mining and exploration licenses• East: 83.9% owned, comprising mining
and pre-mining licenses• Khar Servegen (KS): 100% owned,
comprising mining and exploration licences
Measured Indicated Inferred Total
North 15 Mt 9 Mt 3 Mt 27 Mt
East - - 41 Mt 41 Mt
KS - - 15 Mt 15 Mt
Total 15 Mt 9 Mt 59 Mt 83Mt
South Gobi Project JORC Resources*
Location
Note *: no change to this information from previous disclosures and see competent person statement at end of presentation
SOUTH GOBI EXPANSIONSTRONG MULTI PIT EXPANSION STRATEGY IN NOYON BASIN
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South Gobi Project consists of tenements which cover most of north western extent of the Noyon coal basin
Contains an estimated 50km of basin edge which contains near surface coal bearing stratigraphy
Progressive development of a multiple shallow pit strategy
Serviced by existing centrally located infrastructure
SOUTH GOBI EXPANSIONREGIONAL CONSOLIDATION
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Opportunity to consolidate the South Gobi region through development of operating and marketing arrangements with surrounding Mines and Projects
Utilises TerraCom existing infrastructure including own coal haul road
Applies TerraCom mining and market expertise
Reduces costs in region through increased scale
TERRA ENERGY BNU MINEWORLD CLASS OPERATION IN MONGOLIA
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Productivity Asset Utilisation
0
200
400
600
800
1,000
1,200
CAT6030EXC
CAT390 EXC
Cat777D RD
BCM
/hr
Global First Quartile productivity
0
2,000
4,000
6,000
8,000
Indo
nesia
Aust
ralia
Cana
da
Uni
ted
Stat
es
Mon
golia
Terr
aEn
ergy
Annu
al o
pera
ting
hour
s
Delivering not only Mongolian productivity records but world class productivity from its mining fleet
Asset utilisation in Mongolia is higher than other major producing basins
Have developed this capability in a systematic fashion to ensure repeatable results during expansion anddevelopment of its other assets
Unit m3 mining cost performance is very competitive with global hard coking coal producers
Note: Sourced from extensive internal analysis of best in country mining projects around the world
BNU OPERATIONS STATUSESTABLISHED NEW SUPPLY CHAIN AND REFINED MINE STRATEGY
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Mining operations were suspended in Q1 2016 due to depressed coal market, supply chain performanceissues and full ROM coal stockpiles at BNU Mine.
Mining operations recommenced in Q4 2016 with alternate supply chain established via the Kingho 5.5yrofftake agreement for ~7.5Mt of coal sales over the life of the contract and delivering the following: Underwrites a profitable Mongolian business unit establishing a platform from which further expansion and growth
Has a pricing mechanism with linkages to the seaborne market with payment terms in USD in the form of 100%Irrevocable Letter of Credit issued by first class international bank
Confirms the strong BNU coal brand in China and recognition of the value-in-use of this coal when compared toother HCC available in southern Mongolia and northern China
Shifts the point of sale for BNU coal to minegate which removes Terra from the supply chain management inMongolia and northern China allowing a focus on core competency of mining
Whilst Kingho which is one of the largest transporters and users of coal in northern China will manage the supplychain from minegate to customers in Northern China – BNU Coal will be used primarily for Kingho Coking Plant feed
Terra plan to develop multiple pits to better manage complex geology, coal quality variations and unitcosts which when combined with on-site CHPP will deliver stable long term coal quantities and quality
BNU COAL QUALITYCOAL QUALITY SUPERIOR TO OTHER PRODUCERS IN REGION
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BNU
Washed (Targeted)
BNU
Raw (Targeted)
MMC
Ganqimaodu Pit 3 Washed
MMC
Ganqimaodu Pit 4 Raw
Ceke
1/3 Coking Coal
SouthGobi
Product B
SouthGobi
Product F
Ash (%)db <10.5 20 10.5 23 8-10 12.5 25
VM (%) db 23-27 24-26 28 26 30-33 36 36
Sulfur (%) db 0.3-0.6 0.3-0.7 <0.6 <0.6 <1.0 1.3 1.7
G Index 80-95 60-90 83 85 69 na na
Y Index 22-26 19-24 16 16 9-11 na na
BNU CHPP TO BE CONSTRUCTED IN 2017SIGNIFICANT YIELD, QUALITY AND COMMERCIAL BENEFITS
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Noyon Basin Coal Specification Issues
Coal is soft and friable resulting in high proportion of fines
The coal fines contains a large proportion of vitrinite and hence coking properties
CHPP’s in Mongolia or northern China cannot efficiently deal with this specification of coal
Benefits of CHPP at BNU
Improvement in yields of 3-6% due to CHPP designed specifically to deal with fines
Avoids yield manipulation by third party CHPP operators
Ability to claim 10% Mongolian VAT against operating costs
Reduction in distribution / trucking costs
Ability to expand and wash third party coal in the future
Status
Negotiating vendor finance options / 100% TER owned
Approvals completed, construction to commence by end H1 2017
Specifications Phase 1 CHPP
Raw feed 1.0-1.5 Mtpa
Raw feed rate 200-250 tonnes/hr
Minimum 6,000 hour p.a. run time
Operate in extreme temperatures (-30 degrees to +40 degrees)
Dual product
Modular for future scalability and easily relocatable
Delivers <10.5% ash product with ability to deliver higher ash / higher yield options
TRANSPORT INFRASTRUCTURE DEVELOPMENTSTERRA HAS BUILT ROAD TO CHINA
June 2013, entered into a 20 year contract:
• With the Mongolian government for the construction and use of wholly-owned haul road connecting BNU to the Chinese border at Ceke
• The road is accessible by all Terra assets located in the South Gobi project
December 2013, the haulage road construction was completed
July 2014, the Mongolian government awarded a haulage permit to Terra
Future development:
• Currently converting road permit into a state concession agreement
• Will enable external investor / operator to be brought in to upgrade the road (bitumen sealing) and charge a toll
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UVS PROJECTCOKING COAL AND POTASH ASSETS IN NORTHERN MONGOLIA
35
Uvs basin is prospective for coal, evapourite salts (potash), Uranium, associated brines and clays (Li and Mg)
Mining of coking coal and potash occurs in neighbouring areas
Located close to a 220Kw power line which runs from Russia into Mongolia
The sealed Kyzyl Highway intersects the project area and runs to the Russian Border crossing at Borshoo
Access into Russia then leads to railways which service Vladivostok port.
There is also a planned future rail link to China proposed from the region
MID GOBI PROJECTEXPLORATION TENEMENTS WITH SUBSTANTIAL THERMAL COAL RESOURCES
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Potential for large scale open cut operations to supply power producers in China and Mongolia
Consists of two exploration licenses spanning 360 sq’ km in Mongolia’s Dundgovi Province
Located approximately 200 km south of Ulaanbaatar and just over 200 km west of the Mongolian railway grid, which offers a logistics route to China via the Erlianhaote border crossing
Since acquiring the Mid Gobi Project in 2011, TerraCom has established JORC 2004 compliant coal resources of 221.4 Mt classed as Indicated and Inferred
Quality testing to date suggests the coals to be a combination of mid and low rank thermal coal
Measured Indicated Inferred Total
Mid Gobi - 32 Mt 189 Mt 221 Mt
Mid Gobi Project – JORC Resources*
Location
Note *: no change to this information from previous disclosures and see competent person statement at end of presentation
TERRACOM
Several JORC Resource estimates disclosed in this presentation were prepared and first disclosed under the JORC Code 2004. None have been updated since to comply with the JORC Code 2012 on thebasis that the information has not materially changed since it was last reported.Clyde Park & SpringsureTechnical Information in this presentation on Clyde Park and Springsure resources (dated February 2012) and Springsure resources (dated November 2012) has been prepared by Kim Maloney who is amember of the Australasian Institute of Mining & Metallurgy. Kim has experience within the Central Queensland coal mines and has held various roles in these mine’s Technical Services, includingExploration Geologist, Mine Geologist and Geology Superintendent. Kim is a Competent Person for coal as defined by the [JORC Code (2012)}. Kim is a Senior Resource Geologist, previously with MoultrieGeology. Her principal qualifications are a Bachelor of Science from James Cook University and a Masters of Business Administration (Human Resource Management) from the Central QueenslandUniversity.South Gobi NorthTechnical information in this report in relation to coal quality and washability analysis of South Gobi Project and fluorite mineralisation on Mid Gobi Project has been compiled by Mr Peter Goodman, whois a Member of the Australasian Institute of Mining and Metallurgy (Member #307830) and has had sufficient experience which is relevant to the style of mineralisation under consideration and to theactivities which are being undertaken to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.Mr. Goodman is employed by Terra Energy LLC and consents to the inclusion of the matters based on his information in the form and context in which it appears. Mr Goodman has over 10 yearsexperience in the processing of fluorite type deposits and over 20 years experience in the design and construction of coal processing facilities.The information provided by Salva Resources in this report to which this statement is attached that relates to Exploration Results is based on information compiled by Dr Aldo Van Heeswijck, who is aMember of The Australasian Institute of Mining and Metallurgy. Dr Van Heeswijck is employed by Salva Resources and has sufficient experience which is relevant to the style of mineralisation and type ofdeposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves’. Dr Aldo Van Heeswijck consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.BNU NorthTechnical information in this presentation that relates coal resource estimates for the BNU North Deposit is based on information compiled and reviewed by Mr Craig Williams, who is a member of theAustralasian Institute of Mining & Metallurgy. Mr Williams, Principal Consultant – Geology and a fulltime employee of HDR|Salva, has sufficient experience that is relevant to the style of mineralisationunder consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC Code (2012). Craig Williams consents to the inclusion in the report of the mattersbased on this information in the form and context in which it appears.South Gobi, Middle Gobi & HughendenTechnical information in this presentation in relation to the exploration targets and JORC Resources for South Gobi, Middle Gobi, and Hughenden Projects has been compiled by Mr. Mark Biggs,previously Principal Geologist of Moultrie Database and Modelling. Mr Biggs now works for ROM Resources Pty Ltd, Mr. Biggs is a member of the Australasian Institute of Mining and Metallurgy and hasover 25 years of experience relevant to the style and type of coal deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined by theAustralasian Code for Reporting of Minerals Resources and Reserves (JORC) 2012. The resource information in this report is being released to the Australian Securities Exchange. Mark Biggs consents tothe inclusion in the report of the matters based on this information in the form and context in which it appears.Noyon Syncline / Khar SevergenTechnical information in this presentation in relation to the exploration target tonnage range and coal resources of Noyon Syncline is based on information reviewed by Mr Troy Turner who is a memberof the Australian Institute of Mining and Metallurgy and is a full time employee of Xenith Consulting Pty Ltd. Mr Turner is a qualified geologist and has sufficient experience which is relevant to the style ofmineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reportingof Exploration Results, Mineral Resources and Ore Reserves’. Mr Turner consents to the inclusion in the report of the matters based on the information, in the form and context in which it appears.Blair Athol Resource and ReservesTechnical information in this presentation in relation to the coal resources of Blair Athol is based on information reviewed by Mr Troy Turner who is a member of the Australian Institute of Mining andMetallurgy and is a full time employee of Xenith Consulting Pty Ltd. Mr Turner is a qualified geologist and has sufficient experience which is relevant to the style of mineralisation and type of depositunder consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves’. Technical Information in this presentation in relation to Reserves for Blair Athol has been prepared by Mr John Cawte under the guidelines of the 2012 edition of theAustralasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code). Mr Turner and Mr Cawte consent to the inclusion in the report of the matters based on the information, in the formand context in which it appears.
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COMPETENT PERSON STATEMENT